Fundstrat co-founder Tom Lee says Ethereum (CRYPTO: ETH) is one of the most mispriced assets in the world, even after dropping from nearly $5,000 six months ago to under $2,000 today.

Why Does Lee Think Ethereum Is Undervalued?

In an interview with Michael van de Poppe published on Monday, Lee built his valuation case around the assets that eventually need to move on-chain.

Gold sits at roughly $22 trillion, global equities exceed $100 trillion, and real estate approaches $300 trillion. To make those assets composable and digital, he argued, they run on Ethereum.

“If Ethereum is at $300 billion, it’s grossly undervalued,” Lee said. “Should it be a $1, $2, or even $5 trillion network in the next few years? Yeah, I can easily see it,” he added.

Lee outlined three reasons Ethereum’s value grows over time: AI agents will need neutral settlement infrastructure no single company controls, tokenization is moving trillions in financial assets on-chain, and Ethereum’s 11-year track record gives institutions a level of trust no newer chain can match.

What Is Holding Ethereum Back Right Now?

Lee said the underperformance is not about Ethereum’s fundamentals.

The two legs of the investment thesis, AI integration and tokenization, are playing out slower than the market expected. 

That delayed timeline, combined with the broader crypto deleveraging that followed the October 2025 market break, explains the price lag.

He also pointed to narrative drift around the Ethereum Foundation, which has been streamlining its role.

Lee argued that this shift does not make Ethereum less valuable, but it has created confusion among holders looking for a clearer institutional signal.

“The fundamentals are actually much stronger and the growth ramps look much bigger,” Lee said. “But the price is lagging.”

Where Does Lee See The Cycle Going?

Lee told van de Poppe he sees August or October as the likely cycle low, consistent with the four-year cycle pattern that has held across prior bear markets. 

He compared waiting for confirmation to preparing for a hurricane after it hits, pointing to gold and Nvidia as assets where most gains compressed into a short window after years of building.

On AI agents, Lee said the probability of delegated economic agents carrying wallets, making payments, and conducting machine-to-machine commerce within three years is “pretty close to 100%.” 

That infrastructure, he argued, cannot run on centralized systems and points directly to public blockchains.

Lee also said 2027 could produce the largest stock market gains of a generation as AI drives corporate margin expansion, central banks ease, and earnings growth accelerates on a real basis.

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